The rupee traded in a narrow range and settled for the day 2 paise higher at 73.64 against the US dollar on Friday, tracking recovery in doemstic equities towards the fag-end of the session.

At the interbank forex market, the domestic unit opened at 73.65 against the US dollar and witnessed an intra-day high of 73.56 and a low of 73.71.

The local unit finally closed at 73.64 against the American currency, registering a rise of 2 paise over its previous close.

On Thursday, the rupee snapped its two-day winning streak to close 9 paise lower at 73.66 against the US dollar.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.12 per cent higher at 90.93.

“Due to coronavirus widespread, the dollar is loosing its safe haven properties and is keeping USDINR spot below the psychological level of 74. Also, next week is the Fed policy and we expect Powell to update the forecasts for growth and inflation along with dovish stance,” said Rahul Gupta, Head of Research- Currency, Emkay Global Financial Services.

Gupta further noted that “the downside risks to ‘no deal’ Brexit will keep dollar bulls intact, so unless the spot doesn’t consistently trade above 74, the trading range would continue to be 73.25-74. If 74 breaks then prices can surge towards 74.20 zone“.

Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 2,259.98 crore on a net basis on Thursday, according to exchange data.

-Published on Dec 11th, 2020

Source:thehindubusinessline